The 'Warrior' Within Jonathan Schwartz

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The Corner Office

He soon had a deal to get the company's software supported on NeXT's $25,000 machines, but Jobs insisted that the program be priced at $99, like similar PC software of the day. Schwartz refused. Instead, he maintained a $1,000 price, telling Jobs, "When you sell your computer at PC prices, I'll give you PC pricing on my software," recalls NeXT Developer Relations Manager Chris MacAskill. That stubbornness helped Lighthouse become the largest, most successful supplier of NeXT software. "A lot of people tried to write software for NeXT machines," says MacAskill. "As far as I know, Jonathan was the only one that was a profitable…I've seen what a warrior he is."

Sun later agreed to support NeXT's operating system on its computers, and ended up buying Lighthouse in 1996 for $22 million. Schwartz stayed on as a product manager, but quickly rose through a series of jobs, and by 2002 was running Sun's entire software unit. He admits to being ruthlessly pragmatic about corporate politics—particularly the need to keep moving. "I've had 11 jobs in 10 years," he recently told a group of new Sun managers, "and every time I moved I got more valuable to Sun—and I felt it." He advised them to "pick your own boss," to ensure it was someone who could help them learn and keep rising. "You need to make the most of your time here." The flip side is that many inside the company feel Schwartz is too political—a backstabber who rose in part by taking credit for others' work.

Whatever route he took, Schwartz was singled out by CEO Scott McNealy as a potential successor by 2004. McNealy, who remains Sun's chairman, says he offered Schwartz the post of chief operating officer and was surprised when Schwartz said he'd only take it if McNealy agreed to stay out of Schwartz' staff meetings. McNealy refused at first, but relented a year later. McNealy says Schwartz wasted little time in executing tough changes that had long been under consideration. Case in point: Schwartz made the call to open the source code for Sun's Solaris operating system. "It was very controversial, but there was no teeth gnashing, no hand-wringing. He just did it."

Different Styles

By late 2005, Schwartz was anxious to make the jump to the corner office. McNealy says he delayed to let Sun's business and product line improve to ensure a smooth transition. "He wasn't sure whether I was trying to lead him on," recalls McNealy. "I told him, 'Relax, you're extremely hirable.'"

When the transition came in April, 2006, Schwartz insisted that McNealy not only stay away from staff meetings, but that he stay out of annual leadership meetings of top managers and that he not have a formal role in setting strategy. "As difficult as it was for Scott, he pretty much threw me the keys and said call me when you need me," Schwartz says. "And I know that had to be really, really painful for him."

Also problematic for Schwartz was McNealy's penchant for headline-grabbing barbs against Sun's competitors. In his first week as CEO, Schwartz called Hewlett-Packard (HPQ) CEO Mark Hurd, IBM (IBM) CEO Sam Palmisano, Dell (DELL) Chairman Michael Dell, and others to offer an olive branch and explore ways to work together. On occasion, Schwartz also read McNealy the riot act for bad-mouthing a company with which Sun was negotiating, sources say. "I reverted once in a while to my core DNA, but he hauls me aside and tells me when I'm not being helpful," McNealy says. "Even if he's wrong, he's right—because he's the boss."

Being Bloggable

Schwartz isn't above stretching the bounds of corporate good manners himself. At a recent conference on the future of media, Schwartz chastised an executive from Viacom (VIA) for pulling popular shows like The Colbert Report from Google's (GOOG) YouTube. "You're an important customer, so please don't take that the wrong way," Schwartz said. "But you're deluding yourself if you think this is a good thing."

Schwartz has begun to back up his tough talk with some real accomplishments. By returning the company to profitability, big customers are no longer fearful the supplier could go under. By inking deals with former rivals such as Intel (INTC) and IBM, he has expanded the ways Sun's technology can get to customers Sun doesn't have the sales breadth to reach.

Now, Schwartz is focused on the key question: Can Sun grow? More than ever, say insiders, he's pushing the company to move faster, even if it means unveiling a new initiative before it's ready. That's what happened with Project Blackbox. Sun managers had planned to unveil the data-center-in-a-shipping-container in early 2007. Schwartz told them at a meeting in mid-2006 that he wanted the launch to happen in just six weeks. "You hear 'When can I blog about it?' a lot," says Sun Chief Technology Officer Greg Papadopoulos. "In some sense it's also a character flaw. Jonathan is constantly having to make sure he's not running too fast."

Burrows is a senior writer for BusinessWeek, based in Silicon Valley .